That is why the IRS does not tax the consideration until the option is exercised or it expires.A transfer of title is what triggers the DOS.

By no means is this an exact science, there are many variables that can derail the master planI exercise restraint and discipline when determining whether something is worth keeping or is a dog with fleas.I love the feedback.

You can also look online, but I find it's easier when you can physically see and touch the items.After you have completed this exercise a couple times, you should have a really good idea what your material costs will be for most aspects of a rehab.

- Taxation of Lease Purchase is covered by no better teacher than Al Aiello, - Lastly avoiding equitable interest can be achieved by not delivering an Option to Purchase directly to the Tenant on the Lease Option; rather you can hold an option to purchase in escrow to be delivered to the tenant once say 24 months lease has been completed, then tenant has 90 days to exercise their option (get financing).

Hence there are many valid reasons a lender will not exercise the DOS rights.

Is pick up exercise and lifting.

Also, does anyone give any of the option money back if the tenant doesn't exercise the option?

Thanks Mike, atarget, and Jim for all of your tips.I agree it's not a good deal, but this was a great exercise for me to do the analysis.Is there a Cincinnati REIA meeting tomorrow?

I would have the LLC exercise the option and then sell the LLC to the developer.

Lease/options can force you into a foreclosure situation even though you are the landlord.That said a lease/option can still be a good idea.If you use a rent credit that reduces the rent to below market levels the lender could have issues later when the person goes to exercise their option.